The Complete Inventory Management Guide for Retailers.

[Pages:19]The Complete Inventory Management Guide for Retailers.

How to set up, manage, and optimize a winning inventory system for your retail store.

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Inventory management keeps many retailers up at night, and for good reason: staying on top of your store's stock levels is a balancing act that can make or break your sales and customer satisfaction.

Too much stock on hand ties up your capital and can end up killing your margins if you decide to mark down unsold products. But not having enough merchandise is just as bad and can lead to lost sales as well as lower customer satisfaction and loyalty. So how can you can get stock levels *just right* in your store? Well, each retailer has different inventory needs, so there aren't any silver bullet for this. There are, however, steps and best practices that you can implement to figure out the right product mix for your shop. And that's exactly what this guide is for. Below you'll find tips, how-tos, and examples to help you win at inventory management. From picking the right solution and entering your products, to tracking stock levels and automating parts of the process, this guide has you covered. Whether you're choosing your inventory software for the first time or you already have a system but are looking to improve and further optimize it, you're bound to pick up something useful from this handy guide. Let's get started!

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Setup

Setting up your inventory program can be a challenge. Between researching providers, picking the right solution, and entering all your products into the system, the task can get overwhelming or confusing, real fast. That's where this chapter comes in. The following paragraphs will walk you through the process of finding and vetting solutions. It'll talk about what to look for, what questions to ask, and how to make sure that a system is a good fit for your store. It'll also offers stories from real-life merchants so you can get a glimpse of how other retailers were able to zero in on the right solution. Finally, this section will discuss how to efficiently import products into your inventory system so you can start tracking and selling in no time.

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Choosing the right solution.

Do some internal info-gathering before you go out to look for the right inventory system. Think about your needs and your day-to-day activities. If you're always on the move, for instance, then you may need an inventory system that runs great on a tablet. Do you have an online store? Then set your sights on solutions that play nice with your ecommerce platform.

It's also important that you think beyond your current needs and reflect on your plans for the future. For instance, if you're growing rapidly or are considering opening up multiple stores going forward, see to it that the system you choose can scale with you.

That's what Andrey Pronin, owner of a charming gift shop called Podarok did. He chose Vend as his inventory and POS software because it enabled him to stay on top of various parts of his business, including stock levels, accounting, and ecommerce, for a fraction of the cost that he would've spent with a traditional system. Doing so, according to Andrey, enabled them to "reduce costs and most importantly, scale"

"Within less than a year of starting we were able to open another shop in Oxford (our first is in Cambridge). The startup costs of a new shop were tiny compared to other similar businesses because we didn't need to buy bulky equipment or pay huge fees. In we went, and started selling straight away!"

ANDREY PRONIN - PODAROK

It's important that you think about your requirements before evaluating solutions. There are a lot of options out there, so knowing your needs right from the get-go will enable you to narrow down your choices and make your search less confusing or overwhelming.

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Think of this step as creating an inventory wish list. A modern retail store, for example can write down their inventory management needs in this format:

? Must have the capabilities to run on tablets ? Must be able to generate inventory reports on margins and top-sellers ? Must be able to connect with accounting software ? Must integrate with online shopping cart

Once you have all your inventory requirements on paper, then you can start to seriously consider and compare products.

Going through the usual research channels (such as Google) is always a good idea, but you may also want to get the opinions of fellow entrepreneurs. Check out the inventory system that your retail friends are using. Head to retail groups and forums and ask members about their inventory software. You may also want to consult with business solutions experts and ask what inventory systems they recommend.

Whatever you decide, though, we highly advise that you go with cloud-based inventory software. Unlike old school systems such as spreadsheets that live in your computer or (gulp!) on paper, cloud-based inventory systems can work from anywhere that has a web connection, making them safer, faster, and easier to manage.

For one thing, cloud solutions enable you to access your data from multiple devices or locations as long as you have a web connection. You're never tied down to a single device, so whether you're in your store manning the register, at home in front of your computer, or on the go on your mobile device, you can still view your inventory and know what's going on in your business.

Most cloud-based software also allows integrations that let you connect the program to other apps. So if, say, you want to link your inventory with your accounting software to make reconciliations easier and reduce data entry, you totally can. (More on this in a bit.)

Finally, your inventory information is much safer in the cloud. With web-based software, your data doesn't live in your computer, so even if (knock on wood) something happens to your devices (e.g., they get stolen or damaged), you can rest assured, knowing that your data is intact.

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Michelle and George Wales, founders of Conscious Vibes and CV Caf? in Bermuda, learned this lesson the hard way when a computer problem wiped out all of their data.

"All our inventory was on one computer! It had taken us many, many hours to upload all our inventory info, so when we lost it all in one go, it felt like a big setback,"

MICHELLE WALES - CONCIOUS VIBES

The incident prodded them to switch to an online POS and inventory system (Vend), which helped them keep their information secure and run their business more efficiently.

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Setting up your products in your inventory system.

The next step is adding products into your inventory system. This process may vary depending on what program you have, but you'll typically have the option of either importing products from a CSV file or entering item information manually.

Regardless of which route you choose, though, you should prepare product details in advance and have them all in one place, so you can go about the process as efficiently as possible.

Set aside some time to compile the product information to be entered into the system. This process can take anywhere from a few hours to several days, and you may need to enlist the help of some of your employees. It all depends on how many products you have, how organized the information is, and of course, how busy you are.

If you already have all your product info in a neat CSV file or if you're using existing barcodes, then the process will take significantly less time, compared to you having to manually enter the data.

In any case, below are some of the item details you'll want to have handy when adding products into the system:

Product Name - This is the name or title you give to each item. Keep it descriptive, but brief and accurate, so it's easy to find or remember (e.g., [Brand name] Maxi Skirt).

Product Description - Write a statement or two to describe the item. Will your customers see these product descriptions (i.e., will they be displayed on your ecommerce site)? If so, inject some personality into them.

Product Image - If you can, also upload product images into your inventory system. Doing so will make it easier for you to find items when you're ringing up sales. This will also be helpful if you have an ecommerce integration, as the images you have in your inventory or POS system will be displayed on your site.

SKU - The stock keeping unit, aka SKU, is a unique identifier for each of your products. If you have existing barcodes or supplier-barcoded products, you can simply scan or enter them into the system. You also have the option of creating your own barcodes, using your inventory software.

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Cost - Enter the amount you spent creating or sourcing the item.

Price - Enter the amount that you're selling the item for.

Taxes - The amount of tax you need to charge will depend on where your store is located, so check the taxation laws in your area if you're not sure how much to put here.

Supplier Information - Enter the individuals or business from whom you obtain your inventory from.

Quantity - Put in the amount of stock you have for each item. If you're using a modern inventory system, this field should automatically update as you sell products.

The list above isn't comprehensive, and depending on your inventory software, you'll likely find additional fields to fill out. Try to complete as many as you can. The more information you have in your system, the richer data you'll get and the easier it will be to track what's going on in your store.

Also, be sure to keep your formatting consistent. For instance, if you enter a product name using the format "product type + brand + color," then make sure all your item names appear the same way. This will keep your system organized and make it easier for you to find and sort items.

That wraps up the first part of our inventory management guide. Hopefully, the information above will enable you to effectively find and set up your inventory system. In the next section, we'll teach you how to develop the right processes, so you can track and manage stock with ease.

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